ACCC slashes Telstra’s fixed line services charges

ACCC slashes Telstra’s fixed line services charges

ACCC slashes Telstra’s fixed line services charges

ACCC slashes Telstra’s fixed line services charges

ACCC slashes Telstra’s fixed line services charges

The Australian Competition and Consumer Commission (ACCC) has released its final decision on the prices other operators have to pay to use Telstra’s (ASX:TLS) copper network in providing telecommunications services to consumers.

According to a statement on the ASX, the final decision will see a one-off uniform decrease of 9.4 per cent in access prices from current levels for the seven fixed line access services. This revises the 9.6 per cent fall estimated in the June draft decision further.

The seven declared fixed line services include the unconditioned local loop service (ULLS); line sharing service (LSS); wholesale line rental (WLR); local carriage service (LCS); fixed originating access service (FOAS); fixed terminating access service (FTAS); and wholesale ADSL service.

The ACCC’s final decision also covers connection and disconnection charges and a decision to not exempt the CBD areas from coverage under the final access determinations.

ACCC chairman, Rod Sims, said the ACCC has dealt with a number of complex issues during this inquiry, including the unique circumstances of the transition from Telstra’s copper network to the nbn.

“Our final decision on prices is the result of a number of considerations, with downward pressures more than offsetting upward pressures. Downward pressures largely come from lower expenditures, falling cost of capital, the treatment of the effects of migration to the nbn and updated information on the nbn rollout,” he said.

Sims claimed it more than offsets upward pressures from a shrinking fixed line market due to consumers moving away from fixed line services and to mobile services.

“Importantly, users of Telstra’s network should not pay the higher costs that result from fewer customers as nbn migration occurs. If there is no adjustment for these higher costs then customers who have not yet been migrated to the nbn will ultimately pay significantly higher prices for copper based services.”

According to Sims, the ACCC has taken this approach because it considers that users of the fixed line network have not caused the asset redundancy and under-utilisation and will not be able to use those assets and capacity in the future.

Read more: Telstra adds three Group Executives to further growth agenda

“It would not be in the long-term interests of end users (LTIE) for costs to be allocated to users of the network who do not cause them, particularly when Telstra has an avenue to recover those costs,” he added.

The new prices will apply from November 1, 2015, to June 30, 2019.

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